A Liquidity Ratio That Indicates the Extent to Which Short-Term

question 67

Multiple Choice

A liquidity ratio that indicates the extent to which short-term assets can decline and still be adequate to pay short-term liabilities is referred to as the:

• A) current ratio.
• B) return on investment.
• C) debt-equity ratio.
• D) leverage ratio.
• E) profitability ratio.

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Definitions:

Conglomerate Merger

A merger between companies that operate in entirely different industries.

Supplier

An entity that provides goods or services to another organization involved in a supply chain.

Conglomerate

A large corporation composed of diverse companies operating in various industries under one corporate group.

Production Synergies

The cost-saving or performance-enhancing effects achieved when two or more entities (e.g., companies or departments) combine their production efforts.